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How it works
- You get 30 days of average wage for every year worked: ₩2,934,783 for 1 year at ₩3,000,000 a month.
- You need at least 1 year of work and 15 or more hours a week. Foreign employees are covered the same way.
- The employer must pay within 14 days of your leaving, usually into an IRP account.
- Severance pay is taxed separately from salary. The calculator estimates that tax too.
Severance pay by monthly pay and years worked
Last day of work September 30, 2026, no bonus or leave pay. Amounts are before tax.
| Monthly pay | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| ₩2,500,000 | ₩2,445,652 | ₩7,343,657 | ₩12,234,961 | ₩24,469,923 |
| ₩3,000,000 | ₩2,934,783 | ₩8,812,388 | ₩14,681,954 | ₩29,363,907 |
| ₩4,000,000 | ₩3,913,043 | ₩11,749,851 | ₩19,575,938 | ₩39,151,876 |
| ₩5,000,000 | ₩4,891,304 | ₩14,687,314 | ₩24,469,923 | ₩48,939,845 |
Calculated with the calculator above. Days are counted on the calendar, so a period with February 29 is one day longer.
The formula: 30 days of average wage per year
Severance pay = average daily wage × 30 × days employed ÷ 365
With ₩3,000,000 a month for 3 years (1,096 days), the average daily wage is about ₩97,826 and severance is ₩8,812,388. Bonuses and unused leave pay from the last year count at 3/12 of the yearly amount. A ₩6,000,000 bonus and ₩600,000 leave pay raise the 3-year amount to ₩10,427,993.
Who gets it: 1 year and 15 hours a week
You are entitled to severance pay (퇴직금) if you worked for the same employer for at least 1 year without a break and were scheduled for 15 hours a week or more on average over 4 weeks. Part-time work counts if it meets both rules.
The year is counted on the calendar. Someone who started on October 1, 2025 must work through September 30, 2026. Leaving one day earlier means 364 days and no severance pay.
Retirement income tax
Severance pay is taxed separately from salary, with retirement income tax (퇴직소득세). Deductions grow with years of service. On ₩8,812,388 after 3 years the tax is ₩100,630 including local income tax. If the money goes into an IRP (individual retirement pension) account, the tax is deferred until you withdraw it.
Foreign workers and departure guarantee insurance
The severance rules are the same for foreign employees. The Labor Standards Act bans discrimination in working conditions on the basis of nationality.
If you were hired under the Act on the Employment of Foreign Workers (the Employment Permit System), your employer must also enroll you in departure guarantee insurance (출국만기보험) and pay into it every month. This insurance counts as the employer's severance plan. It is paid within 14 days after you leave Korea, or within 14 days of your claim if you claim it for a change of visa status or after departure. A claim expires 3 years after it arises. That act does not cover, for example, holders of C-4, E-1 to E-8 or H-1 visas.
FAQ
Do foreigners get severance pay in Korea?
Yes. A foreign employee who works at least 1 year and 15 hours a week or more gets severance pay under the same formula as a Korean employee. The Labor Standards Act (Article 6) bans different working conditions based on nationality.
How much severance pay do I get for 1 year in Korea?
Roughly one month of pay. With ₩3,000,000 a month, 1 year ending September 30, 2026 gives ₩2,934,783, and 3 years give ₩8,812,388.
Can I get severance pay if I worked less than 1 year?
No. The law requires at least 1 year of continuous work. Your employer can pay more than the law requires if your contract or company rules say so.
When must my employer pay severance?
Within 14 days after you leave, unless you both agree to a later date for special reasons. In principle it is paid into your IRP account; leaving at age 55 or older is one of the exceptions.
What is departure guarantee insurance?
Employers of workers under the Employment Permit System must buy this insurance and pay monthly premiums. It counts as the employer's severance plan and is paid out within 14 days after the worker leaves Korea.
Do bonuses count toward severance pay?
Yes. 3/12 of the bonuses and unused annual leave pay you received in the last 12 months is added to your last 3 months of pay.
Sources
- Employee Retirement Benefit Security Act (근로자퇴직급여 보장법) Article 4(1): 1 year of service and 15 hours a week; Article 8(1): 30 days of average wage per year; Article 9: payment within 14 days and transfer to an IRP
- Labor Standards Act (근로기준법) Article 2(1)6: average wage over the last 3 months
- Labor Standards Act (근로기준법) Article 6: no discrimination in working conditions based on nationality (checked October 7, 2026 at law.go.kr)
- Act on the Employment of Foreign Workers (외국인근로자의 고용 등에 관한 법률) Article 13: departure guarantee insurance; Article 22: no discrimination; Enforcement Decree Article 2: workers outside the act (checked October 7, 2026 at law.go.kr)
- Income Tax Act (소득세법) Articles 48 and 55: retirement income tax; Local Tax Act (지방세법) Article 103-13: local income tax
- Ministry of Employment and Labor severance pay calculator (moel.go.kr): method for the average wage period, bonuses and leave pay
Rules last checked on October 7, 2026.
Not included
- Defined contribution (DC) retirement pension plans, where the amount depends on contributions and returns.
- Periods left out of the average wage, such as probation, parental leave or sick leave for a work injury.
- Interim severance payments, tax-free portions and limits for executives.
- How much departure guarantee insurance pays out. It can differ from this legal amount.
- Whether you worked 15 hours a week. The calculator assumes you did.